KENTUCKY STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED JUNE 30, 2024

Section III – Findings and Questioned Costs – Major Federal Programs (Continued)

2024 – 008 – Exit Counseling

Federal Agency: US Department of Education

Federal Program Name: Federal Direct Student Loans

Assistance Listing Number: 84.268

Federal Award Identification Number and Year: P268K230147; P268K240147 - 2024

Award Period: July 1, 2023 – June 30, 2024

Type of Finding:

• Significant Deficiency in Internal Control over Compliance
• Other Matters

Criteria or specific requirement: Per the Code of Federal Regulations, 34 CFR 685.304(b), if a student borrower withdraws or graduates from school, exit counseling must be provided either electronically, by mailing, or by email to the student borrower.

Condition: Students who withdrew or graduated from the University did not receive exit counseling information.

Questioned costs: None

Context: During our testing, it was noted that eight out of the twenty-nine students who were required to receive exit counseling information did not receive it.

Cause: The University's processes and controls did not ensure that exit counseling was completed or did not retain proper support to indicate this process took place.

Effect: Students are not receiving the proper loan counseling which may contribute to not repaying loans to the DoE on time.

Repeat Finding: Yes, 2023-015

Recommendation: We recommend the University review its policies and procedures around sending exit counseling information to students to ensure students are receiving proper counseling.

Views of responsible officials: There is no disagreement with the audit finding.